other interconnecting projects that would be from the same purpose and substantially the same form of the agreement with north star solar. thirdly, the funds received from north star solar would be appropriated to the puc to mitigate the impacts on the city's transmission system. >> there are a couple recommendations that the budget analyst put forward. we're going to talk about them in the report. quickly from the standpoint of tracing the appropriation of 2.9 on budget and finance reserve pending the puc's provision of the details of how that is expended. my understanding the department agrees with that recommendation? >> yes, we do. >> thank you. there is a second part of it, for future mitigations or contracts that get into place, the budget analyst really has the intention of wanting to make sure that the board has some level of oversight around that money that comes through. from my understanding of it, the puc is generally and the commission has acted to say when you do receive any of these mitigations that they be used to sure up the transmission lines or some of the other things that it's

meant to mitigate, that via contract or the intention was for mitigation fee, correct? >> that's correct. >> and so, i think what's going to happen is if we have every $100,000 to the budget and finance committee for the same purpose over and over again, that might earn be the best and highest use of our time. * not the puc has come up with alternatives to make sure we still have oversight over it. can you explain that a bit? >> yeah, i think we would recommend that those funds be held on the controller's reserve and we work with the controller to provide reports to the board on expenditures of funds in excess of $100,000 so that it can be done in effect an administrative matter but still reported to the board in a way the board feels like it has full knowledge and ability to control it if there is something going awry. >> why don't we go to the budget analyst report.

>> [speaker not understood] reported under the proposed ordinance, the initial mitigation agreement between north star solar and puc would be for $2.9 million for a procurement of transmission capacity. however, the budget they gave us is actually for higher than that. it is about 2.9 68 million. although they didn't have any kind of detailed expenditure plan. so, we are recommending a budget and finance committee reserve on those funds pending budget details. * i believe they concur with. the second recommendation was this would in fact proactively approve 35 future such mitigation agreements, total of expenditures up to 28.3 million, with no further board of supervisors oversight. we do consider that to be a policy matter. we further recommended that expenditures, appropriations of more than 400,000 come back to the budget and finance committee and to the board of supervisors for approval, but

this is just discretion the puc is offering an alternative proposal. >> and then to the puc. generally with regards to the [speaker not understood] agreement, what are some of the things the puc would use to fund the mitigation? so the mitigation agreement is meant to impact the city's electric system. generally what kinds of things would the puc be spending on -- what would that be? >> excuse me, yeah. the funds would be for projects to sure up the transmission lines, particularly also to install relay protection devices and switches that would in effect if there is a blip in the electricity coming into our system, it can be cut out so that it doesn't ripple through the system and cause widespread damage to our facilities or to the grid. the way the cal aye sew has approached this, they deal with these in clusters. * iso north star is in one cluster, cluster number 1 for lack of a better title of about potentially 20 to 30 projects

that all are in the same or general geographic area that might affect our facilities as they go through the process, we're looking at a set of projects that would protect us from all those projects. as i said, some of those projects may fall by the wayside. so, in the final analysis, there may be, say, 15 projects that end upcoming in. the level of protection, the kinds of things we should be doing would be similar to what we're doing if we were doing all 20 or 30 projects. again, it's online. [speaker not understood] protection devices and switches. >> generally just so i know what we're talking about and that's not being sort of electric grid experts here, when we're talking about bringing online sort of a new solar energy source or somebody wanted to tap in this in this case it's north star solar energy, * what is the problem that gets disrupted. they're feeding into our system, our transmission line to create that even level of energy, that creates a problem?

is that what happens? >> if it's out of phase with our electricity delivery, if it's a spike in energy, any one of those things can actually adversely affect the delivery system and cause failures that were totally unanticipated. it's not that the energy is bad. it has to be lined up exactly with the existing energy sources so that there is not frankly a widespread blackout as a result of some change in phase or wavelength of what they provided into the system. >> so, the mitigation money is really intended to make sure we sure up our transmission lines to deal with those surges just to make sure we don't have widespread blackouts or others in our genesis at theverctiontion, correct? >> that's correct. >> okay. and other entities are receiving this kind of mitigation also? >> yes. electric utilities, existing electric utilities throughout california all need these kinds of protections for their piece of the grid. our partners in the turlock irrigation district are going through exactly the same exercise.

>> and then just so i know, one of the things i think that the budget analyst report brought out is the fact that in this current north star solar contract we're talking about the $2.7 million roughly. but the anticipated level that comes in later on is actually significant, it's about $28 million that is expected and that will all depend on whether the energy sources actually do come online, et cetera. but if it does get to $28 million, is it the intention that we would spend the entire $28 million on those kinds of suring up the transmission lines? is there that level of projects that are necessary, that level expense that is incurred to do that? >> , that is the current estimate of the project necessary to protect our system if everything is connected. if we, say, get about two-thirds of those, we might do a few less things. generally it's roughly that order of magnitude. and, so, as these agreements are finalized, the share per person generated new electricity will vary depending on how many projects survive

the approval projects. >> got it. so, the $28 million is not just some sort of fee that gets assessed by iso. it's really based on an estimate of what we expect we need to spend in order to sure upedth system? >> that's correct, it's abased on a shes item, not cal iso fee. >> thank you. to the budget analyst, i think you've already given your report. * so, anything you would add? okay. why don't we open this item up for public comment. are there members of the public who wish to speak on this item, item number 11? seeing none, public comment is closed. okay, colleagues in front of us we actually have some language that adopts part of what the budget analyst is recommending, which is to put the $2.7 million on reserve, budget and finance committee reserve pending details of the expenditures. and then there was a second portion of the budget analyst's recommendation that had to do with bringing back expenditures that exceed 100,000 every time.

knowing that we are likely are going to be spending money on suring up the transmission line, that is pretty much the projects are pretty much in place. i don't know what people's thoughts are. i think this is a reasonable way to go forward, which is to say put the 2.5 on or have them come back to us. but then also be able to receive from the puc reports of the monies that are coming in and how they expect to spend it and put that on controller reserve. thoughts? supervisor kim. >> thank you. actually, i saw the budget analyst's recommendation and it made sense. but i actually think that this amended recommendation makes a little bit more sense. instead of having this come back every time there is an expenditure of $100,000 or more which can be quite repetitive, i think that this will take care of the repetitiveness issue and bring the puc back when it's necessary. >> thank you. okay. so, we do have amendments before us. supervisor avalos?

>> just a clarifying question. so, these future mitigation funds will be placed on controller reserve and the puc will not use funds in excess of 100,000 prior to report by controller to the boards of supervisors. is that a committee or a report we'll receive in our offices? just want to be clear about how that's expectation to be carried out. >> sure. i believe that that is the -- that would be, to clarify, i believe it's a report by the puc to the board of supervisors and not the controller. i think that's actually incorrect. it should be the puc to the board of supervisors. and then to the puc, would you be able to provide a report to the board? >> yes, we'll be able to provide that report to the board. >> is that the question you mean with the hearing? >> via hearing or just via report that we'll get a document. i just want to make sure that there is a real process * that we can verify is happening because we get reports all the time. they come across our desk.

we might not see it for a month after it's actually provided. so, what is the mechanism for that reporting happening? was that the intent, it would just be a report here at the budget committee? >> sure -- [multiple voices] >> i think that would work for us. i think we have maybe thought about that mechanical point. the idea of having to come back each time we had one of these for $100,000 seemed like administratively it's hard to deal with. if we could bring it back as a group, here's the report on how we're spending the funds, that would make more sense to us. >> perhaps what we can do, i'm not sure if this would work with the puc, but would we be able to do it on a routine basis, like a quarterly basis or some kind of rolling period? because coy see if say you had 10 different agreements coming through. it would be very onerous for you to come 10 different times for $100. >> i think a quarterly basis makes sense. just on the quarterly basis would be when funds are released.

>> would that workout? >> that would workout fine. >> maybe we can amend the language here. puc will not use funds in excess of $100,000 prior to a hearing? >> or to the budget committee -- >> the budget and finance committee on a quarterly basis? >> okay. >> report to the budget and finance committee by the puc on a quarterly basis. >> um-hm. >> i think i would be fine with those amendments and the underlying legislation. the controller has a question. >> if i could. this is clearly a choice for the committee as to what level of delegation of authority you want to have. i think what we have kind of arrived at with this suggestion is no more administratively simple than simply having it on committee reserve. in either case it's going to require action by the committee to release the reserve and it might be simpler to just simply

reserve balances over 100,000 for the committee's action. if you desire to have the item come back before the committee on a regular basis for action, if you're comfortable delegating that authority and having a written report, then i agree with the puc's suggestion. but if you're not comfortable with simply receiving a quarterly report on what's planned and being spent to our office releasing the reserve, i think it's simpler administratively to leave it on committee reserve. >> if i can, perhaps i can suggest if i can rollover this item for just a second and have the puc to consult with folks and make sure it works out programmatically for you. so if you do come on a quarterly basis, does that hold up your projects, do you expect that would be okay? and then we'll come right back to it. could you call item number 10, please. >> item number 10, ordinance amending the san francisco business and tax regulations code by amending article 6 (common administrative provisions) to revise the bonding requirements for parking operators; revise the time to bring an action to collect tax; clarify the extent of a surety's liability; revise the administrative citation appeal process; and make other minor technical changes; amending article 22 (parking stations; revenue control equipment) to clarify that

non-city governmental entities operating parking stations are exempt from the revenue control equipment requirements; and amending the san francisco police code article 17 (miscellaneous license regulations) to clarify that government entities operating parking garages or parking lots are exempt from the permitting requirements applicable to other commercial parking garage and valet operations. >> thank you very much. i believe we have a representative from supervisor campos' office here. >> good morning, supervisors. [speaker not understood] on behalf of supervisor david campos. the legislation before you amends the city's parking enforcement laws under the business and tax code. it reduces the bonding requirement for operators that have a strong record of tax compliance and simplifies the bonding categories. additionally, the legislation includes other clarifications and administrative changes that ms. florence mar who manages the business tax section of the treasurer and tax collector's office will present on. supervisor campos introduced

this legislation after hearing from small parking operators that were having a difficult time meeting the high bonding requirements and larger operators that have operated in good faith with a proven record of responsible third-party tax collection. the sfmta has informed us that their staff has reviewed the legislation and has no concerns and chris schulman is here from the office of small business who will represent the small business commission's findings. i'll now turn over the presentation to ms. mar. thank you. >> good afternoon, supervisors. florence mar, tax director of the office of treasurer tax collectors. we'd like to thank supervisor campos for sponsoring this ordinance. it follows the efforts of former supervisor montgomery gold rick, alioto-pier, [speaker not understood], enforcing the san francisco parking tax. as background, parking tax has been in effect over 40 years.

rent tax paid for parking, the operator collects the tax from the occupant, holds it in trust and remits it to the city on a monthly basis. it is a significant and growing revenue source for the city generating over $70 million annually. most of the tax is appropriated by board and to mta. the three components that i'll mention briefly here relate to parking bond, administrative citations, and the government agencies. parking bonds are required of operators to protect the city's interests and provide security for the taxes that the operator remits to the city. the legislation expands to a level of the bonding required of parking operators from 7 to 18. and this is in response to industry requests for smaller bands of bonding. the legislation also provides for reduced bonding requirements, for operators that have a strong track record

of tax compliance, reducing by as much as half. the legislation makes clarifications about surety rights and obligations. notably, that policies must cover the specific time periods. this provides additional city protection. administrative citations are the tax collector's equivalent of a parking ticket. and they are used to help enforce compliance of tax law. the legislation simplifies the administrative citation process [speaker not understood] for a hearing by mail. this is similar to how the city handles the parking tickets. persons who receive a citation may still have the opportunity to request and have an in-person hearing. if they so choose. legislation clarifies that government -- what government agencies other than the city are responsible for when they

operate a parking location. this change does not apply to third-party operators, but are hired by the government agencies. and those are briefly comments i'm making and thank you. i'm happy to answer any questions you may have. >> thank you very much. just a quick question with reductions in the bonding requirements. do you anticipate any risk associated with it? >> any risk associated with reducing the bonds, these are for those that have a good compliance record. so, there's always a risk but we anticipate it would be a very low one. >> and this is over a track record of generally how long would you determine that they've had a good track record? >> well, the criteria calls for three years. >> three years, thank you. why don't we go to the budget analyst report. actually, i don't believe there is one on this item. okay.

and there's no additional administrative expenses associated with this. are you presenting? >> i'll be very brief, [speaker not understood] on behalf of the small business commission. the obtaining the bond is the most significant barrier to entry for this industry for small businesses. and the commission strongly believes that the increased increments along with the provision for reduced bonding for operators to qualify is a very important step in the right direction and we urge your approval. >> just a question for you. we also have a program to the hrc to provide surety bonding program for small businesses. i understand that the reduction in the bonding requirement would assist small businesses in general. has the small business commission also helped to reach out with the small vendors, parking vendors who may participate in the parking program? >> we did not reach out in the hrc program. we have one of our commissioners is in the industry.

he provided a little bit of expertise, but we did not reach out in relation to the hrc program on this matter. >> and again, we're attacking it from different ways. one is to reduce the bonding requirement for the vendors, which makes sense to me. i think that sounds good. we may also want tone courage people to look into some of the programs that we have for surety bonding. >> and i'll follow-up on that. thank you, chair. >> thank you. okay. thank you. why don't we open this item up for public comment. are there any members of the public who wish to speak on item number 10? good afternoon, supervisors. my name is tim [speaker not understood]. i'm the president of the san francisco parking association. first and foremost, i want to commend treasurer cisneros for [speaker not understood]. and laws like this that require tight reporting and compliance. this is a great piece of legislation and the amendment

is very helpful with small businesses. we have a number of small parking companies in our association. they're very appreciative of this. in addition, the part of the legislation that addresses parking operators in good compliance, the incentivized to pay the tax, to be compliant, and to be current is also a good approach and a good way to go. so, thank you, supervisor campos, for the small business piece. and also for the incentive for the good operators to continue to pay 100% of the tax, which is sorely needed for the city. thanks so much. >> thank you very much. are there other members of the public who wish to speak on item number 10? seeing none, public comment is closed. okay. colleagues, do we have a motion? okay, we have a motion to send the item forward with recommendation and we can do that without objection. okay. and now we're going to return to item number 11.

i believe that the department ha worked with the controller's office to have different language potentially. i think that perhaps you can indicate what the language is. >> yes, we have steve general manager from water. the language would not put the money in the controller's reserve but basically amounts in excess of $100,000 would be on reserve at the budget committee. so, we would come back rather than on quarterly reports, we would just come back for expenditure of funds in excess of $100,000. that we agree is probably the simplest mechanism to put in place for all concerned, give you guys the authority to control it. make it administratively easy for us to do that. >> thank you. to the budget analyst, in terms of the 100,000, remind me why there is the threshold recommended at 100,000. >> we recommended that threshold to be consistent with the grant approval, accept and extend threshold. >> okay.

so, colleagues, we have with recommended change and i'll read that into the record. so, let's see. on page 1 lines 9 and 10, which is consistent with the version that you have before you, the language should have "and placing various mitigation funds on reserve with the board of supervisors." and we would not have the controller. it would just be the board of supervisors. then on page 3 lines 16 and 17, we should add item number 10, that should read the puc will receive any funds for the mitigation [speaker not understood] to mitigate any impacts on the city's electric system. and finally, following line 9 on page 4, it should read, phone fund in excess of 100,000 for a given mitigation agreement shall be placed on budget committee reserve."

so, that would be the language that will be proposed for the amendments in the legislation. and then, to the city attorney, would these be stantive and require a continuance? >> they would not. >> okay. so, colleagues, do we have a motion to accept those amendments? >> so moved. >> we've got a motion to accept those amendments. can we do that without objection? we can do that without objection. and then to the underlying item as amended, do we have a motion to send it forward with recommendation? we have that and we'll do it without objection. thank you very much. okay. let's go to item 12. >> item number 12, hearing to consider the release of reserved funds, municipal transit agency, in the amount of $1,600,000, fy 2011-2012 amendment to ordinance no. 59-12, for the san francisco municipal transportation agency's radio replacement project. >> thank you very much. we have an mta representative

on this item. >> yes, good afternoon, supervisors. my name ashenery kim. i am the project manager for the smt [speaker not understood] replacement project and i am here to present this item. * is henry kim this was presented to the board in april for 1.6 million in revenue bond funds were set aside for sfmta for radio replacement project [speaker not understood] regarding voice and data communication systems for the city. this item was presented on october 18th, endorsed by the committee, and we are here today to request release of the funds. and i believe there is a budget analyst report on this item. >> okay. why don't we actually go to the budget analyst report. >> madam chair, members of the committee, deborah newman from the budget analyst office. as mr. kim has indicated, these funds were placed on reserve last april when sfmta came

forward with proposal for issuing revenue bonds. and at that time, recently prior to that, the board of supervisors had approved the large motorola regional agreement that was a 12-year agreement with motorola to do a public safety regional data communication and radio communication system. and at that point, when the mta was coming forward, they raised a number of questions about how the sfmta project fit in with the regional motorola project and other city departments. there was a request to take a look at this and coordinate the efforts. as mr. kim has indicated, coit has looked at this and on october 18th recommended that the budget and finance committee release this reserve. we are therefore recommending

approval of the release from the $1.6 million on reserve for the sfmta's radio system replacement project. however, i would also note that on october 18th, the coit also approved several other motions, one of which is directing the department of technology to host quarterly radio communication stakeholder meetings with the department of emergency management, sfmta, the public utilities commission, police, fire, and the motorola bay with staff to ensure there is clear and consistent communication about the status of the current and future planned radio communication projects, and directing the sfmta to provide regular reports back to coit and their subcommittees on the project -- on the progress of this project.

in addition, in terms of the regular projects for the city, coit has directed the department of technology to do a study as there is not a plan for the current facilities, the condition of those facilities, and recommendations on how to proceed for other city departments' requirements, technical specifications, timing and a budget for the rest of the city to move forward for their -- to upgrade their radio and data communications. i would also note that the regional motorola bay width system regarding that project in february of 2012, the u.s. congress enacted the middle class tax relief and job creation act which had a provision in it to create a nationwide inter operable

broadband network to assist police, firefighters, and emergency medical personnel on a national -- nationwide basis as opposed to the regional motorola system that we are moving forward with in the bay area. as a result of that, this -- it's called the first responder network authority, first net, this new nationwide system has just met. they had the first meeting in september. the fcc has now assigned all of the communications spectrum rights to this new national organization. my understanding based on our conversations last week is that the motorola system, the bay area regional system is now on hold. so, given the status of the motorola bay width system and the status of the other city

departments' radio communications systems, we have also made two other recommendations requesting that the department of emergency management, which is the lead agency on the motorola bay web system, update the board on this system and how that works vis-a-vis the new federal policies and regulations. and to request in the department of technology, working with the department of emergency management. once they complete the studies that they're doing now on their coordinating the efforts for the rest of the city to bring those forward to the board of supervisors so that they are fully informed on what is going forward. >> thank you very much. supervisor kim? >> thank you. and i know that you don't represent the department of technology, but i'm curious as to whether they agree with the recommendations of the budget analyst. >> i